One of the most common questions I hear from vendor organizations is some variation of the same underlying concern: why is Amazon behaving this way?
The specifics vary from company to company. One business wants to understand why purchase orders have declined. Another is frustrated by a rejected cost increase request. A third is trying to understand why Amazon is asking for additional funding or higher accrual terms. While the circumstances differ, the underlying question is remarkably consistent.
How is Amazon evaluating the business?
Many organizations struggle to answer that question because they naturally evaluate the business through their own lens. They focus on revenue targets, profitability goals, product launches, competitive pressures, inventory constraints, and internal priorities. Amazon is often looking at many of the same facts, but through a different framework.
Understanding that framework is one of the most valuable things a vendor can do. The strongest vendors learn to view the business from both sides of the table. Once they do, many of Amazon’s decisions become easier to understand, even when they disagree with them.
Many 1P brands assume Amazon manages vendor relationships similarly to other retailers.
That assumption is usually wrong.
In many industries, relationships are built through conversations, meetings, trade shows, dinners, and personal connections. Strong relationships often create influence. Face time matters. Accessibility matters. Familiarity matters. The quality of the relationship can meaningfully influence business outcomes.
Amazon operates differently.
That does not mean relationships are unimportant. It means Amazon defines relationships differently than many vendors expect.
Early in my time at Amazon, I made a decision that would have seemed unusual in most industries. I removed the phone from my desk and deleted my phone number from my email signature. I didn’t ask permission. I didn’t make an announcement. Nobody cared.
Looking back, that experience revealed something important about how Amazon operates. The company was not built around spontaneous conversations and relationship management. It was built around systems, processes, data, and scalability. The expectation was not that vendors would call whenever they had a question. The expectation was that the business would run through established mechanisms supported by data and structured decision-making.
That philosophy extends far beyond communication preferences.
Amazon is fundamentally a data-driven company. Performance is measured continuously. Resources are allocated based on expected returns. Decisions are expected to be supported by evidence. As a result, Amazon tends to evaluate vendors based less on the quality of the relationship itself and more on the value the vendor creates and the friction the vendor creates.
That distinction explains far more of Amazon’s behavior than most organizations realize.
The first lens is strategic value.
Many vendors assume Amazon prioritizes relationships primarily based on revenue. Revenue certainly matters, but strategic value often matters more.
Amazon is constantly evaluating whether a brand strengthens its position with customers and whether the assortment creates a meaningful competitive advantage. Category leaders naturally receive attention because customers expect to find them on Amazon. Strong brands attract demand, improve selection, and reinforce Amazon’s position within important categories.
Another consideration is often less visible but equally important. Amazon is constantly evaluating its position relative to competitors. If customers would go elsewhere to purchase a brand, that brand becomes strategically more valuable. If losing a vendor would strengthen a competitor, weaken Amazon’s assortment, or diminish the customer experience, the vendor’s importance increases.
This helps explain why seemingly similar vendors can receive very different levels of attention. Amazon is not evaluating every vendor equally. It is evaluating each vendor relative to the strategic value that vendor creates.
Performance is another major input into Amazon’s decision-making process.
Vendor Managers spend significant time reviewing performance data because data is how Amazon understands whether a business is creating value. That evaluation often includes metrics such as Shipped COGS, Page Views, Conversion rates, Out of Stock %, Lost Featured Offer %, Net PPM %, category share, and growth trends. Performance is evaluated over time, compared against prior periods, and often benchmarked against competitors within the category.
What matters is not simply whether a business is growing.
What matters is whether the business is performing at a level Amazon finds attractive relative to alternative investments.
A vendor may be pleased with modest growth while Amazon sees underperformance relative to the broader category. A vendor may celebrate revenue growth while Amazon sees deteriorating profitability. Both parties are looking at the same business and the same data, yet reaching different conclusions because they are evaluating the business through different lenses.
Understanding that distinction helps explain why some conversations feel misaligned. The disagreement is often not about the data itself. It is about how the data is being interpreted.
If there is one area vendors consistently underestimate, it is economics.
Economics eventually finds its way into nearly every major vendor discussion. A conversation that begins with a cost price increase request often becomes a discussion about profitability. An AVN negotiation may evolve into a broader conversation about MDF or CoOp cost support, Freight Allowance recovery, Damage Allowance funding, or the long-term economics of the relationship. While these discussions appear different on the surface, they are usually different expressions of the same underlying question.
Does this relationship create sufficient economic value for Amazon?
This is one reason revenue growth alone rarely guarantees support. Amazon may be willing to tolerate operational complexity or imperfect execution if the economics remain compelling. Conversely, a rapidly growing business can still face significant pressure if profitability deteriorates.
Many vendor frustrations stem from the assumption that growth and economics move together. Sometimes they do. Often they do not. Amazon has always been willing to challenge vendors whose economics no longer support the relationship, regardless of how strong top-line performance appears.
The strongest vendors understand that Amazon’s economic model influences nearly every major decision. They evaluate proposals, investments, and negotiations through both the vendor lens and the Amazon lens.
Amazon was built for customers.
That reality influences almost everything else.
Customer experience remains one of the company’s most important decision-making frameworks. Product availability, selection, delivery speed, image & A+ Content quality, review count & star rating, and overall customer satisfaction all influence how Amazon evaluates vendors and programs.
However, customer experience is often misunderstood because it is rarely evaluated in isolation.
Amazon is constantly balancing customer outcomes against economics, operational realities, strategic priorities, and scalability. The objective is not to maximize any individual variable. The objective is to optimize the overall system.
This is why vendors occasionally encounter decisions that appear inconsistent. Amazon may support a program in one situation and reject it in another. The difference often lies in how Amazon evaluates the broader set of tradeoffs involved.
Understanding those tradeoffs is often more valuable than focusing on the decision itself.
One of the least discussed aspects of Amazon’s decision-making process is its preference for scalable solutions.
Throughout the company, there is a consistent bias toward systems that can be automated, repeated, and deployed broadly across large organizations. Amazon generally prefers scalable processes over manual intervention, predictable execution over exceptions, and systems over workarounds. That preference influences far more vendor interactions than most organizations realize.
Some of the strongest vendors I worked with were not necessarily the vendors I spoke with most frequently. In many cases, they were the opposite. They understood how the system worked, executed consistently, solved problems before they became escalations, and continued growing the business without requiring constant intervention from Amazon.
Looking back, one of the defining characteristics of those vendors was not simply performance.
It was the absence of friction.
They made it easy for Amazon to do business with them.
Many vendors assume that creating more meetings, requesting more support, or escalating more frequently will strengthen the relationship. Sometimes those actions are necessary. More often, Amazon rewards vendors that make the business easier to operate.
The company has always preferred scalable solutions over exceptions, systems over workarounds, and predictable execution over constant intervention. Vendors who understand that reality tend to work with Amazon more effectively because they align themselves with how Amazon prefers to operate.
Many organizations spend years trying to improve their relationship with Amazon.
A more productive approach is often to focus on the factors Amazon is actually measuring.
Amazon evaluates strategic value. It evaluates business performance. It evaluates economics, customer experience, and scalability. Together, these factors shape Amazon’s decisions, influence resource allocation, and determine how Amazon views the relationship.
Understanding these factors does not guarantee agreement with Amazon’s decisions. It does, however, make those decisions easier to understand.
And that understanding often leads to better decisions on the vendor side of the table.
The strongest vendors I have worked with shared a common characteristic.
They understood that Amazon was evaluating the business through a different lens than they were.
Rather than fighting that reality, they learned to understand it. They invested time learning Amazon’s incentives, Amazon’s economics, and Amazon’s decision-making processes. Over time, they became better at anticipating how Amazon would view opportunities, risks, and tradeoffs.
In many ways, that is the real purpose of understanding how Amazon evaluates vendors.
Not to predict every decision.
But to learn how to see the business from both sides of the table.
